Preview: Adult Online Europe

? "This market has no borders and no politics. It has revenue and growth potential -potential with no end in sight," Teleteria’s Jay Servidio told me. His design and hosting corporation’s adult clients made 26 percent more revenue in 2002 than they did in 2001, success which he attributes to his consistent reminders that, "Finding new streams, connecting to them, and drawing as much revenue as possible from them before they run dry" should always be the number one priority of a Webmaster.

Servidio, it has to be said, has always been uniquely, and infectiously, positive. The overall U.S. picture, however, is that few adult Webmasters have seen such growth these past two years. The credit card networks, especially Visa, have been doing no one any favors, and have had a disproportionately damaging effect on the U.S. market, because of its much heavier reliance on them for payment.

I asked online billing guru, Coulomb’s Dave Knell, for his thoughts. Citing the movement of the adult erotica business from a consolidation phase to one of maturity, he sees the market strategy of the industry changing too - from its inward focus on customer retention to an outward search for new markets.

"We see two things happening," Knell explained. "One is the honed development of products, which is becoming apparent in the billing industry, with its deployment of new technologies, such as geotargeting, to ensure that people are offered quick, easy and appropriate ways to buy the products. The second is companies seeking growth by finding new market segments, principally overseas. Many U.S. companies are now doing that."

Knell is not alone in this view. According to Wasteland.com’s CEO, Colin Rowntree, "Western Europe is currently experiencing the rampant growth of online consumers which the US experienced in the late 1990s." He, too, noted the developments in geotargeting and European-based billing solutions. "American and Canadian adult Webmasters have the infrastructure, content and marketing techniques already in place to reap the benefits of the European marketplace", he told me, adding that "To do so most effectively requires strategic partnerships with European Webmasters, marketers, content providers, translators and billing companies."

This April in Amsterdam, we will see the biggest-ever coming together of all the key European adult online entrepreneurs with the very biggest Webmasters from the USA. Adult Online Europe runs alongside the 30th World Telemedia show, which, pace its venerable status, has constantly re-invented itself since its earliest audiotex days. Indeed, it is fair to say that the robust health of European telemedia, with its dialers, text services, and premium mobile payment systems, has played a key role in the European adult industry’s spectacular growth.

Jan Hendrik Taubert, a German attorney specializing in adult and telemedia business issues, makes a point that is crucial for U.S. Webmasters who are considering expansion into Europe. Speaking specifically about Germany, he talked of, "A large movement for protecting customer rights, driven by the government and consumer protection groups."

While this is no less true of other European countries, or of the United States itself, the consequences are always different. The European continent is not a bloc. Each country has its own moral agenda, rules, and forms of regulation. Experienced local partners will certainly be needed to do things right.

Taubert believes that, "Germany has by far the strictest rulings concerning online protection of minors in the European Union." With new laws coming into force from April 1, 2003, and the setting up of a "commission for youth media protection," Webmasters in Germany itself cannot be sure how Europe’s biggest adult consumer market can buck the trend of stagnation in the German economy. "There is a great uncertainty in the market, with its 5,000 to 7,000 Webmasters," says Taubert, who will be explaining the new German rules in an expected-to-be-packed session at AOE.

Exploring and exploiting new markets is not simply a technical process, but a social one, too. For the strategic partnerships ? which Wasteland’s Rowntree wisely advocates ? to work well, relationships need to begin and develop between players in a congenial setting. April in Amsterdam, take it from me, is unbeatable. In fact, I found so much to like about the place during last year’s AOE/WT show, that I just stayed on and made it my home.

It is now also home to the International chapter of the Network for Online Commerce, the telemedia industry trade association which has sponsored Adult Online Europe/World Telemedia. This year’s three-day (April 27-29) party - sorry; conference and exhibition ? looks like it will be taking over the city, which always erupts anyway on 3oth for Holland’s huge Queensday celebrations.

American and Canadian adult online content is still culturally geared to the North American market because that’s where mass Internet consumption first emerged. Now, as Coulomb’s Knell points out, the global situation has changed. "In January 2000, 50 percent of Internet users were in the USA. Now, the figure is below 30 percent and falling. There will be more European users than U.S. ones by 2005. The rate of growth, too, is faster."

Europe is becoming a content production powerhouse, in addition to its acknowledged leadership in streaming technology and online payment mechanisms that go beyond the credit card. The world’s largest adult content owner, NASDAQ-quoted Private Media Group, is headquartered in Barcelona. For serious U.S. players thinking of moving into the European market, Adult Online Europe provides the earliest available opportunity to check out the quality and cultural nuances of European content, which many consider less formulaic and considerably more diverse than the North American variant.

Amsterdam is known world wide as the home of "the live," whether that means a sex show, a party, or a fine evening’s bongfest in a coffee shop. It was Teleteria’s Jay Servidio who reminded me that the very first live adult Internet feed came out of Amsterdam.

Adult Online Europe will be honoring those pioneers this April, in the only way possible - live on stage. Now, is there anybody left who can doubt Servidio’s proposition that Europe is the next smart move for the U.S. Webmaster?

Martin Stone lives in Amsterdam. He is the news editor for the Network for Online Commerce, and a freelance contributor to AVN Online, Klixxx, World Online Gambling Law Report, OnlineCasinoNews.com, and other publications.